Iron Mountain Boosts 2025 Revenue Outlook to $6.94B with Digital and ALM Growth

Key Highlights from Iron Mountain's Q2 2025 Earnings Call

Iron Mountain (IRM) delivered another quarter of strong financial performance, with double-digit growth across all major segments. The company reported record revenue, adjusted EBITDA, and AFFO for the second quarter of 2025. Revenue increased by 12% to $1.7 billion, while adjusted EBITDA grew by 15% to $628 million, and AFFO rose by 15% to $370 million.

The CEO, William L. Meaney, emphasized the company’s strategic progress, highlighting record revenue in the physical storage business and its 37th consecutive year of organic storage rental growth. He also announced the acquisition of CRC India, a leading Indian digitization services company, which is expected to bolster the company’s digital solutions portfolio. Meaney noted that the company is delivering AI-powered digital solutions through its Insight Digital Experience Platform (DXP).

In addition to the acquisition, the Data Center business showed significant momentum, with 26% organic storage growth in Q2 and a portfolio capacity of 1.3 gigawatts. The Asset Life Cycle Management (ALM) business delivered more than 40% organic growth during the quarter.

Financial Performance and Outlook

Barry A. Hytinen, Executive Vice President and CFO, highlighted the company’s strong financial results, noting that total revenue reached $1.71 billion, up $178 million year-on-year. This represents an 11% increase on a constant currency basis. Hytinen also mentioned that the company exceeded its second-quarter projections by $32 million, driven by strong performance in the ALM business.

Looking ahead, the company raised its full-year 2025 guidance. Total revenue is now expected to be between $6.79 billion and $6.94 billion, reflecting a 12% year-on-year growth at the midpoint. Adjusted EBITDA guidance was increased to between $2.52 billion and $2.57 billion, while AFFO is expected to range between $1.505 billion and $1.53 billion. The acquisition of CRC India is expected to add approximately $8 million to the second-half results.

For the third quarter, the company expects revenue of approximately $1.75 billion, adjusted EBITDA in excess of $650 million, and AFFO of around $385 million.

Business Segment Performance

Total storage revenue for the quarter was $1.01 billion, up $90 million year-on-year and 9% on an organic basis. Total service revenue reached $702 million, an increase of $87 million from the previous year, with organic service growth of 10%.

The Global RIM business achieved record second-quarter revenue of $1.32 billion. Data Center revenue was $189 million in Q2, up $37 million year-on-year, with 26% organic storage rental growth. ALM revenue reached $153 million, up $63 million or 70% year-over-year, with 42% growth on an organic basis.

Adjusted EBITDA margin improved to 36.7%, up 120 basis points year-on-year, and AFFO on a per share basis was $1.24, up 15% compared to last year.

The company invested $477 million in Q2, with $442 million allocated to growth capital expenditures. Net lease-adjusted leverage ended the quarter at 5.0x.

Analyst Questions and Management Responses

During the Q&A session, analysts raised several questions about the company’s operations. Keen Fai Tong from Goldman Sachs asked about the slowdown in data center signings. Meaney explained that customers were prioritizing large campus developments for AI, but the focus has shifted back to cloud and inference infrastructure, where Iron Mountain operates.

Eric Thomas Luebchow from Wells Fargo inquired about the timing and CapEx for data centers. Meaney responded that the company is well-positioned over the next 2 to 3 years, with power availability for 500 megawatts across key campuses.

Shlomo H. Rosenbaum from Stifel asked about ALM growth. Hytinen stated that the growth was balanced across enterprise and data center channels, with volume being the primary driver.

Jonathan Atkin from RBC questioned about hyperscale decommissioning dynamics. Meaney highlighted the company’s strength in offering secure on-site and off-site services, as well as flexible reuse and recycling options. Hytinen added that the pipeline for ALM remains strong.

Tobey O'Brien Sommer from Truist asked about margin flow-through. Hytinen noted that the flow-through rate was 47%, with improving trends across all businesses.

Brendan James Lynch from Barclays asked about the Treasury contract. Meaney clarified that the contract involves digitizing work for the Treasury Department, with most revenue expected in 2026 due to seasonality.

Kevin Damien McVeigh from UBS inquired about megawatt targets. Meaney stated that the expected range for 2025 is 30 to 80 megawatts, with about 6 megawatts leased year-to-date.

Analyst Sentiment and Management Confidence

Analysts expressed some concerns about the timing of data center signings and potential softness in new deals, but they remained interested in the company’s strong pipeline and margin improvements. The overall sentiment was slightly positive to neutral, with a focus on growth sustainability and execution.

Management maintained a confident tone throughout the call, emphasizing operational strength, robust pipelines, and high visibility into future growth. Meaney stated that the company’s performance during the first half of the year exceeded expectations, and the outlook for the second half is equally bright.

Compared to the previous quarter, analyst sentiment remained similar—somewhat guarded with targeted concerns—but management’s tone became even more positive, reinforced by the raised guidance and strong Q2 results.

Quarter-over-Quarter Comparison

Guidance for revenue, adjusted EBITDA, and AFFO was increased from the previous quarter. In Q1, revenue guidance was $6.74 billion to $6.89 billion; in Q2, it was raised to $6.79 billion to $6.94 billion. Adjusted EBITDA guidance increased from $2.505 billion to $2.555 billion to $2.52 billion to $2.57 billion, and AFFO guidance also saw an increase.

Data Center revenue growth expectation for 2026 was newly articulated as "in excess of $1 billion." While analysts focused on data center leasing, ALM growth, and margin sustainability in both quarters, Q2 saw more discussion on the impact of changing customer priorities in data centers and the effects of strategic acquisitions.

Management confidence appeared to strengthen, particularly regarding growth in digital and ALM businesses and the impact of the CRC India acquisition.

Risks and Concerns

Meaney acknowledged lighter-than-planned new lease signings in the Data Center business, attributing it to hyperscale customers focusing on large campus developments for AI. However, he emphasized renewed engagement in "inference and cloud infrastructure," where Iron Mountain’s assets are deployed.

Hytinen noted that future Data Center revenue projections require "no additional leasing," providing some buffer against slower signings. Both Meaney and Hytinen pointed out the highly fragmented and competitive ALM market, but stressed Iron Mountain’s global footprint and secure chain of custody as key differentiators.

Final Takeaway

Iron Mountain delivered another record quarter, with double-digit growth across all major segments and raised its guidance for 2025. Management highlighted the strength of its global storage, digital, and ALM businesses, as well as strategic wins such as the CRC India acquisition and key digital contracts. The company’s leadership expressed high confidence in sustaining double-digit revenue and profit growth, citing robust pipelines, operational leverage, and a diversified business model well-positioned for continued expansion.